What is a Single-Charity Fund and why you need one in 2021

The last year and a half has been a wild ride. But there’s a bright spot in 2021 that’s about to sunset. Under the CARES Act, you can give up to 100 percent of your adjusted gross income to maximize tax savings and give more to the causes you love.

To do this, your donations must be in the form of cash gifts made directly to the charities you wish to support (not your Giving Fund). And while you may want to give some of your support to charities before the year-end, you might feel that others would be better off to receive your support more gradually over time.

If that’s the case, a Single-Charity Fund at NCF can help. In many respects, a Single-Charity Fund is similar to a Giving Fund (donor-advised fund) at NCF. Like a Giving Fund, a gift to a Single-Charity Fund before December 31, 2020 allows you to qualify for a tax deduction this year. And it permits you to grow those funds by investing them in a tax-favored environment, to the extent that they’re not all granted out by year-end.

But unlike a Giving Fund, which enables you to recommend grants to multiple charities, your grant recommendations for a Single-Charity Fund must go to one single identified organization that you’ve named as the beneficiary of the fund. For that reason, you may wish to set up multiple Single-Charity Funds if you know that you have a number of charities you want to support, but want to take the time to prayerfully discern when those resources should be made available to each one.

This type of giving is also beneficial for anyone wanting to set aside a sum for one specific ministry, which can be granted over time. The charity must be declared when the fund is opened, and the Single-Charity Fund ensures that distributions will always be granted to the named charity

If you have questions about the Single-Charity Fund at NCF and how it might further your giving goals for 2020, please reach out to your NCF team today. If you don’t have a local team, visit ncfgiving.com/locations to find an office near you.

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